London South East: Jordan central bank says is running Capital Bank

By Suleiman al-Khalidi

AMMAN, July 10 (Reuters) - Jordan's central bank has taken over the management of Capital Bank after disputes within its board that would have threatened the bank's solid financial position, the central bank governor said on Friday.

Umayya Toukan said in a statement the monetary authorities decided to dissolve the current board of the bank and set up a temporary management committee under his supervision to run its operations for six months.

'The bank's financial position is good. The matter relates to administrative violations. Dissolving the board is a precautionary move as fears had grown of the negative impact of continued divisions within the bank's board that would affect the bank's performance,' Toukan said.

Jordan's monetary authorities would not hesitate to act decisively and adopt any measures to preserve the financial soundness of the banking sector, Toukan said. 'This is especially so at this phase of the global financial crisis. This move will help the economy to continue to effectively handle the repercussions of the global crisis,' Toukan said.

The bank's shares will be suspended from trading as of next Sunday, when weekly trading at the Amman bourse begins. An Iraqi investor, Hassan Kubah, a scion of an old merchant family which owns Basra International Bank for Investment, along with a group of Arab investors last January took 49 percent of the bank after buying out leading Jordanian investors. (more)